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Economist Talks Dollars and Sense
As an economics student at U of G, Paul Redman never imagined that he would return to campus as a guest lecturer, but he found himself standing in front of several hundred economics students on March 9, lecturing on the role that regulators play in keeping the financial system on track.
“It’s great to be back here in Guelph,” said Redman as he addressed Prof. Evie Adomait’s class in Rozanski Hall. “Evie was just asking me if I ever thought that I would come back and be on this side of the lecture hall, and I can safely say, no, that never crossed my mind.”
Redman is no stranger to economics classes at U of G, having completed both a bachelor’s and master’s degree in economics.
As principal economist at the Ontario Securities Commission (OSC), he keeps a close watch on developments in the financial markets. He and the economics group at the OSC monitor market developments and trends and work with other policy staff to analyze the economic impact of new regulatory policies.
“The OSC administers and enforces securities law in Ontario,” he explained, adding that such regulations are designed to protect investors from fraudulent activities and foster fair and efficient capital markets and confidence in capital markets.
Using examples from the recent financial crisis, Redman explained that confidence plays a vital role in maintaining the stability of financial markets. Many countries experienced rapid increases in housing prices from 2000 to mid-2006, but it was the problems in the U.S. market that seemed to have the largest impact on the global economy.
Redman said: “People look at the United States as the financial centre of the world. When it became apparent that the U.S. banking system was experiencing problems, fear spread, and people started to think, ‘If it can happen to U.S. banks, it could happen to anybody’s banks.’”
Another focus of Redman’s remarks was how interconnections between capital markets and their participants can mean that if one market fails, the entire system can suffer disruptions. There is a greater appreciation amongst regulators of the risks posed by interconnected financial markets. Regulators in the banking, insurance and securities industries all play a role in maintaining transparency and overseeing business conduct to prevent financial meltdowns.
“All of these organizations work together to promote financial stability,” said Redman.
